It is natural as we approach the new year to contemplate all that has happened in 2016 and to prepare for 2017.  One of the tasks to consider is estate planning at year end to ensure your assets and interests are aligned for the new year.  What does this entail?

Estate planning for most San Diegans should begin with a revocable trust.  Why do we need a trust and how is this necessary?  The trust is a foundation of estate planning.  It organizes and protects your assets, while minimizing taxes and allowing assets to pass directly to spouses, heirs and beneficiaries based upon your wishes.  Three situations where a trust should be a mandatory part of your planning:

  1. If you own your own home (no matter how little or great the equity)
  2. If you own your own business or an interest in a business
  3. Blended Families – where one or both spouses have children from a prior marriage

The simple fact of home ownership is the time and expense of probate.  Once you pass you want to ensure your surviving spouse has clear title to the house, correct?  Well in many cases yes, but lets begin with the blended family scenario.  How will you ensure that a portion of your estate is passed to the children from your previous marriage?  Many people are rightly concerned that estates can be  squandered and surviving spouses can quickly become estranged from these heirs.  The equity in your home may be one of the primary sources of inheritance that you wish to pass on.  In blended situations it is often best to establish irrevocable trusts for the children of each spouse and ensure that these are funded appropriately upon the passing of one of the spouses.  In this way you can rest assured your children or beneficiaries will be provided for no matter what circumstances arise after your passing.

Business owners must consider “succession planning.”  Business ownership should always include estate planning at year end to plan for the minimization of tax on income in the coming year, and to protect all that you have built with your time, investment and hard work.  What happens to the business if you become incapacitated or pass away?  How do you ensure that your voting authority and management responsibilities are effectively protected?  Should these be passed on to your spouse or children?  Is one child specifically adept at business while another may be categorized more as a “spend-thrift?”  Do you want the company to stay within the family or should your trust establish instructions on how the company will continue to operate while a new manager is identified?  Should the company be sold and the assets divided between your spouse and heirs you wish to protect?

Finally there is the issue of home ownership.  When the owner of a home does not have a trust (and the ownership of the house is not placed within that trust) the asset must pass through probate.  Probate will tie up the disposition of the house for more than a year, and the average cost of probate for the median home in San Diego will be at least $27,000.  That is just to dispose of the home.  The cost of a well crafted trust is a fraction of this cost.

We invite you to contact the experienced estate planning attorneys at Allen Barron.  As you consider estate planning at year end Allen Barron’s estate, tax, and accounting services allow you to maximize economies of scale while providing a broader and more inclusive insight on your affairs in general.  There is no need to have an accountant, a tax preparer, an attorney and a financial planner.  We invite you to contact us or call 866-631-3470 for a free consultation.

Contact an Estate Planning, Business Law Or Tax Attorney Today

To set up a free, no-obligation consultation with one of our knowledgeable San Diego based estate planning, business and tax lawyers, or learn more about our tax preparation, accounting and business advisory services call us at 866-631-3470 or contact us.